SMART Act: Making Medicare Easier for Insurers and Consumers

SMART. RIMS. No, we’re not talking about the new line of children play sets from V-tech (though they do look pretty cool). And no, we’re not talking about rims to customize your Smart Car either (yes, people really do that). We’re talking about the Strengthening Medicare and Repaying Taxpayers Act, which President Obama signed back in January of 2013.

The SMART Act was designed to “improve and clarify the federal government’s otherwise unmanageable ability to seek reimbursement for healthcare expenses paid by Medicare and arising from a compensable tort.” It also makes the process more efficient and predictable for worker’s compensation carriers and primary payers. The SMART Act allows the Centers for Medicare and Medicaid Services (CMS) to know what’s supposed to come in and what’s supposed to be paid out.

Benefits for Workers Compensation Carriers

Those who conducted business before the SMART Act was signed into law understand the headaches surrounding whether or not a claimant was Medicare eligible. It was like playing “Deal or No Deal,” because each case was a mystery. Everyone can take a collective deep sigh of relief, because the CMS has made it much easier to navigate their system. Here are the improvements or those currently in development:

The Query System – (Currently negative) Used to determine whether individuals are Medicare eligible.

In Development – A workable system that avoids inputting Medicare numbers and Social Security Numbers (SSNs).

Safe Harbor – (Positive) The primary payer is unable to obtain the plaintiff’s SSN after a good faith effort in order to save the primary payer from litigation if the plaintiff chooses not to provide their SSN or Medicare number.

3 Year Statute of Limitation – (Positive) To be used for MSP recovery actions. It accrues from the date of receipt of the Section 111 report (applies to all MSP claims).

Benefits for Everybody

Worker’s comp insurers are not the only people that benefit from the relatively new legislation. Ordinary people will also have an easier time understanding exactly what they owe or are owed.

Reimbursement Amount Deadline – CMS has 65 days from the receipt of a request to provide the Medicare reimbursement amount.

Can be extended by 30 days if additional notice is provided to CMS (failure to respond to initial request).

After said period, parties may rely on reimbursement value on CMS website.

Liability Claim Exemptions – Some liability claims will be exempt from reporting and reimbursement if the claim falls below annual threshold calculated by Secretary of Health and Human Services.

Civil Penalties for Non-Compliance – mandatory insurance reporting requirements are now discretionary and “up to” $1,000 per day of non-compliance.

Security – a new reporting process will make it impossible for reporting entities do not have access to SSNs or Health Identification Claim Numbers.

The process for improvement is still ongoing, because even though it is an improvement over the previous law, it still has room to grow. The Risk & Insurance Management Society Inc. has very recently made recommendations in a letter submitted by RIMS President Carolyn M. Snow to the Department of Health and Services. They want: (1) to define metrics to determine the extent of monetary penalties, (2) a sliding scale of monetary penalties, and (3) a safe harbor for entities that make a good faith effort to obtain pertinent information from beneficiaries or claimants. It’s an ongoing process but hopefully it will result in a better, more transparent way for people and insurance firms to understand the workings of Medicare.